On Nov 28, 6:56*am, Dave wrote:

I fail to see how putting more crap on credit cards helps the economy in
the long term. *The sooner you realize that you are screwed, the sooner
you will take steps to mitigate said screwedness.


Barack Obama says that we have to "jolt" the economy. That certainly
makes sense, if you take the media's account of the economy
seriously-- but should the media be taken seriously?

Amid all the political and media hysteria, national output has
declined by less than one-half of one percent. In fact, it may not
have declined even that much-- or at all-- when the statistics are
revised later, as they very often are.

We are not talking about the Great Depression, when output dropped by
one-third and unemployment soared to 25 percent.

What we are talking about is a golden political opportunity for
politicians to use the current financial crisis to fundamentally
change an economy that has been successful for more than two
centuries, so that politicians can henceforth micro-manage all sorts
of businesses and play Robin Hood, taking from those who are not
likely to vote for them and transferring part of their earnings to
those who will vote for them.

For that, the politicians need lots of hype, and that is being
generously supplied by the media.

Whatever the merits of trying to shore up some financial institutions,
in order to prevent a major disruption of the credit flows that keep
the whole economy going, what has in fact been done has been to create
a huge pot of money-- hundreds of billions of dollars-- that
politicians can use to give out goodies hither and yon, to whomever
they please for whatever reason they please.

No doubt we could all use a few billion dollars every now and then.
But the question of who actually gets it will be strictly in the hands
of Barack Obama, Nancy Pelosi and Harry Reid. It is one of the few
parts of the legacy of the Bush administration that the Democrats are
not likely to criticize.

Much as we may deplore partisanship in Washington, bipartisan
disasters are often twice as bad as partisan disasters-- and this is a
bipartisan disaster in the making.

Too many people who argue that there is a beneficial role for the
government to play in the economy glide swiftly from that to the
conclusion that the government will in fact confine itself to playing
such a role.

In the light of history, this is a faith which passeth all
understanding. Even in the case of the Great Depression of the 1930s,
increasing numbers of economists and historians who have looked back
at that era have concluded that, on net balance, government
intervention prolonged the Great Depression.

Many of those who have, over the years, praised the fact that this was
the first time that the federal government took responsibility for
trying to get the country out of a depression do not ask what seems
like the logical follow-up question: Did this depression therefore end
faster than other depressions where the government stood by and did
nothing?

The Great Depression of the 1930s was in fact the longest-lasting of
all our depressions.

Government policy in the 1930s was another bipartisan disaster.
Despite a myth that Herbert Hoover was a "do nothing" president, he
was the first President of the United States to step in to try to put
the economy back on track.

With the passing years, it has increasingly been recognized that what
FDR did was largely a further extension of what Hoover had done. Where
Hoover made things worse, FDR made them much worse.

Herbert Hoover did what Barack Obama is proposing to do. Hoover raised
taxes on high-income people and put restrictions on international
trade, in order to try to save American jobs. It didn't work then and
it is not likely to work now.

Perhaps the most disastrous of all the counterproductive policies of
the federal government was the National Industrial Recovery Act under
FDR, which set out to do exactly what the politicians today want to
do-- micro-manage businesses.

Fortunately, the Supreme Court declared that Act unconstitutional,
sparing the country an even bigger disaster.

Today, it is unlikely that the courts will let anything as old-
fashioned as the Constitution stand in the way of "change." In short,
the economy today has some serious problems but things are not
desperate, though they can be made desperate by politicians.

http://townhall.com/columnists/Thoma...nomy?page=full